Shift the risk of outsourcing: Build-Operate-Transform-Transfer (BOTT)
Scale with the BOTT business model
As a risk-shifting alternative to traditional outsourcing, many multinational organizations are adopting the Build-Operate-Transform-Transfer (BOTT) model. Neither in-house nor conventionally outsourced, BOTT preserves control by enlisting a partner to stand up, stabilize, transform, and eventually transition new service centers back to the organization.
How the BOTT business model preserves control & extends transformative digital capabilities
The world of service delivery is constantly evolving. For multinational organizations, navigating through disruptive market forces and rapidly shifting needs of the enterprise can mean exploring innovative service delivery models that balance the development of in-house capabilities and leveraging of external expertise.
Transformation can be a struggle for many businesses, but by integrating enterprise and provider resources and extending digital capabilities across the organization, a BOTT strategy can help companies launch and sustain truly transformational change.
Traditional outsourcing is a well-recognized driver in reducing costs and increasing service levels while enabling a business to focus on its core functions. Building in-house provides the opportunity to retain control and develop service capabilities internally.
Within a BOTT business model, a company can enlist the help of a partner to stand up, stabilize, transform by bringing a range of disruptive technologies and process changes to bear across the enterprise and eventually transition back the delivery center with transformation capabilities. A well-structured BOTT model utilizes the Center Office model to effectively deliver and transform services. A Center Office is an integrated approach to operations, strategy, talent, and customer experience can help enterprises make targeted investments that can ultimately free them of decades of technical debt and treat transformation not as a sporadic, one-off event but as an ongoing capacity for organizational change.
Why consider a BOTT?
Your organization has decided to move forward with a new or enhanced service delivery model. You have concerns over having the wherewithal to stand up a captive center on your own, but you still want to retain more control than a complete outsourcing solution. Or you want to enhance existing offshore operations, but you do not have the capacity. Additionally, you want to operationalize transformative process and technology solutions that would allow your enterprise to unlock new levers of efficiency, but you do not have the internal bandwidth.
BOTT differs from outsourcing with continuous improvement metrics in that the providers’ capacity to change is geared more toward strategic positioning of the organization than merely cost reduction. It relies on consultative as well as operational expertise across people, process, technology, and industry domains.
The option to transfer these capabilities if and when the enterprise is ready to assume them is always on the table.
Elements of BOTT Success
To realize transformative visions, a BOTT strategy should contain the following elements:
- Design for the right scope of work, keeping in mind core versus noncore capabilities along with considerations like location and security.
- Leadership to sponsor potentially painful change, promote an inclusive culture, and provide governance and oversight.
- Ongoing change management and employee engagement to monitor progress, motivate teams, and communicate change.
- A dedicated team to sustain and manage transformation once the transfer to the enterprise is complete.
- A diverse set of delivery models, including agile development, to proactively address business needs.
- Functional, local, and industry expertise to deliver efficient processes and business insights across the enterprise.
Why now?
The client perspective
Looking beyond outsourcing but needing the flexibility to grow at a higher velocity than what’s organically possible, clients are increasingly turning to BOTT business models today. The BOTT approach can compress time to maturity, and therefore time to value, while still reducing dependence on third parties. Companies that may not have both the capabilities to stand up and transform a delivery center and the capacity to prioritize over competing programs can leverage the BOTT business model. The ability to respond promptly to market demands or contractions is advantageous in today’s environment. The BOTT model enables flexibility to quickly scale up or down or even more easily pivot toward other priority initiatives.
The vendor perspective
One of the crucial requirements for a BOTT is finding the right service delivery partner, and until recently, service providers often shied away from the model. In the early and mid-2000s, majority of them were in the beginning stages of achieving the brand and scale that they enjoy today. Unless for strategic purposes, entering a new industry, or gaining functional capabilities in an attractive space, providers have been selective in entering BOTT relationships. However, service providers today have seen revenue growth cannibalized by recent innovations around robotics, automation, and cognitive technology. To help offset a decline in top-line revenue, today’s service providers have been increasingly willing to explore a hybrid model that clients view as more strategic and oriented towards technological agility.
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Transformation can be a struggle for many businesses, but by integrating enterprise and provider resources and extending digital capabilities across the organization, a BOTT strategy can help companies launch and sustain truly transformational change.
Want to learn more about BOTT, what makes it successful, and how to begin your BOTT journey? Download our full perspective and contact one of us below.
Srivats Srinivasan
